April 21, 2021 Comments Off on GPB Holdings II LP “Ponzi-Like Scheme” – Recovery for Investors Blog, Current Investigations, Securities Fraud

GPB Holdings II LP “Ponzi-Like Scheme” – Recovery for Investors

GPB Holdings II LP Lawsuits Investigation Update, featured by top securities fraud attorneys, The White Law Group

GPB Holdings II LP Lawsuits Investigation Update

The White Law Group continues to investigate potential securities lawsuits involving broker dealers who recommended GPB Holdings II and other GPB offerings to its clients.

GPB Holdings II LP is a private placement fund sponsored by GPB Capital Holdings, LLC, a New York-based global asset management firm.

GPB Charged with “Ponzi-like Scheme” in February 2021

On February 4, 2021, the CEO of a GPB Capital Holdings, and two others were arrested in connection with a massive “Ponzi-like scheme” that allegedly defrauded 17,000 investors across the U.S. out of more than $1.7 billion, according to the U.S. Attorney’s Office for the Eastern District of New York.

Three GPB executives were charged with fraud, wire fraud and conspiracy.

The Securities and Exchange Commission and seven state regulators reportedly filed similar charges on February 4. The SEC also reportedly charged GPB Capital with violating the whistleblower protection laws.

According to the complaint, the GPB executives allegedly lied to investors about the source of money used to make an 8% annualized distribution payment to investors.

The firm and two executives also allegedly falsified financial statements to inflate the limited partnership funds’ income so that it would appear to be generating sufficient income to cover the distribution payments.

Further, they purportedly told investors that their 8% monthly distributions would be fully covered by profits of the portfolio’s companies.

Instead the investors were at least partially paid with funds from new investors.

The SEC alleges that the “Ponzi-like scheme” continued for more than four years because GPB was able to hide the funds’ financial condition from investors, neglecting to deliver audited financial statements and register two of its funds with the SEC.

Class Action Lawsuits filed against GPB Capital Holdings

GPB Capital has been in trouble since 2018 when William Galvin and the Massachusetts Securities Division first  launched an investigation into the “sale practices” of 63 Broker Dealers who were selling the GPB capital private placements which led to a halt in sales and suspension of distributions.

There have been numerous lawsuits filed against GPB since then, alleging serious  financial misconduct and accusations of an alleged Ponzi scheme.

The firm has reportedly raised $1.5 billion in investor equity through various private placement offerings in the automotive retail and waste management sectors. Although one of its funds made a special distribution last year, the firm has not paid any other distributions since 2018.

More information on the Firm’s investigation of GPB Capital:

GPB Capital Execs Arrested for Allegations of “Ponzi-like Scheme”
Michael Cohn,Ex-GPB Capital Exec Pleads Guilty to Stealing SEC…
GPB Capital Holdings: Takes Millions in Loans from the Fed
Secretary Galvin Brings Charges against GPB Capital

GPB Holdings II LP Investment Losses

GPB Capital filed a form D in 2018 to raise capital from investors for the offering GPB Holdings II LP. The total offering amount sold to 6,095 investors was purportedly $645,813,889, according to the filing.

The following is a list of broker dealers that allegedly sold GPB Holdings II to investors, according to the Form D filings:

Axiom Capital Management, Inc
Ascendant Alternative Strategies, LLC
ACCELERATED CAPITAL GROUP
ADVISORY GROUP EQUITY SERVICES LTD.
AEGIS CAPITAL CORP.
AUSDAL FINANCIAL PARTNERS, INC.
CENTER STREET SECURITIES, INC.
ARKADIOS CAPITAL
AEON CAPITAL INC
AVERE FINANCIAL GROUP, LLC
BCG Securities, Inc.
CABOT LODGE SECURITIES LLC
CALTON & ASSOCIATES, INC.
LION STREET FINANCIAL, LLC
CAPITAL INVESTMENT GROUP, INC.
IBN FINANCIAL SERVICES, INC.
COASTAL EQUITIES, INC.
CROWN CAPITAL SECURITIES, L.P.
CRYSTAL BAY SECURITIES INC.
EMERSON EQUITY LLC
GENEOS WEALTH MANAGEMENT, INC.
PARITER SECURITIES, LLC
SANDLAPPER SECURITIES, LLC
VESTECH SECURITIES, INC.
STEPHEN A. KOHN & ASSOCIATES, LTD.
WESTERN INTERNATIONAL SECURITIES, INC.
NATIONAL SECURITIES CORPORATION
ORCHARD SECURITIES, LLC
INTERNATIONAL ASSETS ADVISORY, LLC
CAPITAL FINANCIAL SERVICES, INC.
CASCADE FINANCIAL MANAGEMENT, INC.
D.H. HILL SECURITIES, LLLP
DETALUS SECURITIES, LLC
INNOVATION PARTNERS LLC
KINGSBURY CAPITAL, INC.
PRIVATE CLIENT SERVICES, LLC
ROYAL ALLIANCE ASSOCIATES, INC.
VANDERBILT SECURITIES, LLC
WESTPARK CAPITAL, INC
UNITED PLANNERS’ FINANCIAL SERVICES OF AMERICA
DAVID A. NOYES & COMPANY
DEMPSEY LORD SMITH, LLC
DFPG INVESTMENTS, INC.
DINOSAUR FINANCIAL GROUP, L.L.C
FSC SECURITIES CORPORATION
GREAT POINT CAPITAL LLC
LANDOLT SECURITIES, INC.
LOWELL & COMPANY, INC.
MOLONEY SECURITIES CO., INC.
MSC – BD, LLC
NEWBRIDGE SECURITIES CORPORATION
PURSHE KAPLAN STERLING INVESTMENTS
SAGEPOINT FINANCIAL, INC
MONEY CONCEPTS CAPITAL CORP
SILBER BENNETT FINANCIAL, INC
UHLMANN PRICE SECURITIES, LLC
WHITEHALL-PARKER SECURITIES, INC.
WOODBURY FINANCIAL SERVICES, INC

GPB Holdings II – Recovery of Investment Losses

The White Law Group is currently representing numerous investors in claims against their brokerage firms in connections with their investments in risky GPB Capital offerings, such as GPB Holdings II LP, GPB Automotive Portfolio LP and GPB NYC Development LP.

Private placement investments such as GPB offerings are highly complex, high risk investments. They are only suitable for sophisticated, accredited investors and institutions.

Broker dealers are required to perform adequate due diligence on all investment recommendations they make. They must ensure that each investment is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.

If a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be liable for investment losses through FINRA arbitration.

Potential Lawsuits to Recover Financial Losses

If you have suffered losses investing in a GPB Holdings II or another GPB offering, you may be able to file a complaint against your brokerage firm. Please call the securities attorneys at The White Law Group for a free consultation at 1-888-637-5510.

These claims are distinct from the class action filed directly against GPB Capital and could be pursued concurrently.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois.  For more information on the firm and its representation of investors, visit https://www.whitesecuritieslaw.com.

 

 

 

 

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